City of Rockford Community Development Department

Transcription

1 City of Rockford Community Development Department Revised July 2005

2 GENERAL ELIGIBILITY REQUIREMENTS (For West Side Alive and Homestead Partnership programs ONLY) 1. Applicant must be an U.S. Citizen or registered alien (hold an Alien Registration or Receipt Card 1551 Green Card). 2. Applicant must be at least 18 years of age. 3. Applicant must be a first-time homebuyer i.e. not own a residential property within the last three (3) years, or be displaced/forced to move. 4. Applicant must have had stable monthly income for the last two (2) years. 5. Applicant must be credit worthy: a) All collections, judgments, etc. must be paid or households with small collections may be referred to the lease purchase program. b) It must be at least two (2) years or more since a Chapter 13 or Chapter 7 Bankruptcy has been discharged. 6. Applicant s monthly income must support the mortgage payment, which consists of principal, interest, property taxes, and homeowner s insurance. 7. If married, the loan must be applied for jointly or absent spouse will be required to sign Homestead Waiver waiving any rights to the property. 8. Total annual household income must be at or below 80% of median: Family *Income Family *Income Size Size 1 $33,900 or less 5 $52,250 or less 2 $38,700 or less 6 $56,150 or less 3 $43,550 or less 7 $60,000 or less 4 $48,400 or less 8 $63,900 or less * Subject to change annually. Income is based on the total current gross income of all persons that are going to be living in the home. 9. Applicant must attend and complete the homebuyer s training seminar offered through Rockford Area Affordable Housing Coalition (RAAHC) PRIOR to purchasing a property. For further information call The Rockford Housing Authority s Buying a Home Workshop is considered an acceptable substitute. As of 3/1/03, a certificate is only valid for three (3) years. Applicants with a certificate over 3 years old must attend a free one on one refresher course with RAAHC prior to closing. 10. At closing, Homebuyers must provide evidence of paid homeowner s insurance and pay for a water service hookup fee. 11. Properties purchased must remain a single-family, owner-occupied dwelling for the term of affordability (HELP! Program ONLY - will assist 1-4 unit owner-occupied units), 5-15 years as determined by the Department of Housing and Urban Development (HUD). Page 1

3 Application Process 1. Applications may be obtained via website or by contacting: City of Rockford Community Development Department Neighborhood Development Division 425 E. State Street, Rockford, IL (815) Application(s) must be submitted with an application fee: Married = $20.00 Unmarried = $20.00 application fee per applicant 3. An interview for applicants who meet the pre-application requirements will be scheduled. Those who do not meet the pre-application requirements will also be notified. The following must be brought to the interview: a) Two (2) years of tax returns or three (3) years, if self-employed. b) Documentation of income i.e., one (1) month of most recent check stubs, social security statement, child support, pension, etc. c) Six (6) most recent checking bank statements and one (1) most recent for all other deposit accounts. d) ID or driver s license e) Resident Alien card, if not a U.S. Citizen f) Divorce Decree or legal separation papers (if applicable) Applications are processed on a first-come, first-serve basis, with the exception of the West Side Alive! Program. The West Side Alive! Program is required to serve a certain number of very-low income households. Applicants of very low income or already residing in the focus areas may be brought to the top of the waiting list. Page 2

4 WEST SIDE ALIVE! PROGRAM The West Side Alive Program makes financing available for applicant(s) to purchase newly constructed homes built on city-owned lots. The purchase price varies depending upon the home selected and the location. The West Side Alive! Program provides the following: A conventional loan through a local participating lender at their current market rate. A 30 year balloon loan through the Illinois Housing Development Authority (IHDA) at a zero percent (0%) interest rate. Various deferred mortgages for downpayment and closing costs. Deferred mortgage loans are forgiven within 5 to 15 years. Other Requirements: 1. Homebuyers must provide $500 or $1,000 (depending on homebuyer s income) as a NON- REFUNDABLE down payment. This cannot be a gift. 2. Homebuyers must maintain the property as their principal residence for the term of affordability. The term of affordability, which is 5 to 15 years, is determined by the Department of Housing and Urban Development (HUD). The monthly mortgage payment is approximately between $480 - $520. This payment includes principal, interest, taxes and insurance. Page 3

5 HOMESTEAD PARTNERSHIP PROGRAM 50/50 & Lease Purchase HOMESTEAD 50/50 The City of Rockford purchases and rehabilitates homes that are then sold through the Homestead 50/50 Program. Through this program, funds are provided for the purchase of these homes. The sales price of each home is the after-rehabilitation appraised value. Financing for the purchase will be provided as follows: 50% of the purchase price plus closing costs will be provided in the form of a loan through a local participating lender at the current interest rate. The remaining 50% of the purchase price will be provided in the form of a loan through the City of Rockford at zero percent (0%) interest rate plus a grant for the closing costs. All costs to rehabilitate the property over and above its after-rehab value will be provided in the form of a grant and no repayment is required. Homestead 50/50 Program Example: Appraised Value $50,000 Lender: $25,000 at current interest rate $500 closing costs (included in loan amount) City: $25,000 at 0% interest rate $500 grant for closing costs The City of Rockford may also sell a limited number of rehabilitated homes through a Lease Purchase Program. Those that do not qualify for the Homestead Program 50/50 may be eligible for the Homestead Lease Purchase Program. The Applicant(s) may lease to purchase the property for a term up to two (2) years. A certain portion of the lease payments will be applied to reduce the purchase price of the property. At the end of the lease period, the applicant must obtain financing through a lender or through the City of Rockford s Homestead Partnership Program, as previously described. Page 4

6 OTHER HOMEBUYER PROGRAMS: Public Safety Officers & Teachers Program The City of Rockford offers to home buyers who are public safety officers and teachers assistance to purchase homes being sold by the Department of Housing and Urban Development (HUD). This program is being offered in an effort to ensure that homeownership opportunities are made available to those charged with the responsibility of ensuring the safety and well-being of residents in Rockford and to help promote safe neighborhoods within the City of Rockford s Community Development Block Grant area by furthering the community law enforcement efforts. Properties available through HUD via Golden Feather Realty Service will be made available and discounted to eligible program participants. Eligible participants are public safety officers or teachers who intend to occupy the property as their primary residence for at least three years. The purchase price of the property may be discounted by 10%, 30% or even 50% or more depending upon the location of the property and current employment (police officer, fire fighter or teacher) of the program participant. Other restrictions may apply. Who qualifies as a public safety officer or teacher? Public Safety Officer. A Public Safety Officer is defined as an individual who is (1) employed full time by a Federal, State, county or municipal government; (2) sworn to uphold the law or public safety and includes law enforcement officers and fire fighters, (3) law enforcement officers must have the general power of arrest not just arrest authority limited to a building or facility. Officers also qualify if they are a college or university police officer with general power of arrest; (4) personnel are required to purchase a home in the city of Rockford and (5) must be in good standing with the department. Teacher. A teacher is defined as an individual employed full time by a public school district, private school, or Federal, State, county or a educational agency, who is in good standing, and holds a current State-level certification, as a classroom teacher or administrator in grades K through 12. Page 5

7 HELP! HOMEOWNERSHIP PROGRAM HELP! is offered through Illinois Housing Development Authority (IHDA). IHDA provides a gift of 3% of the purchase price as down payment for 1-4 unit properties with one (1) unit owneroccupied and must be located in the Mid Town North, South Main, or Seventh St. TIF area (see maps located in back of brochure). IHDA s loan is a 30-year fixed rate loan at below market interest rates, currently 6.15%. In addition, if eligible, the City of Rockford may provide rehabilitation assistance for exterior improvements and interior health and safety improvements for properties located in the Mid Town North and South Main areas (see Need to Repair Your Home or Rental Property brochure for further details). Apply through one of the following local lenders: Alpine Bank Patricia Brown Amcore Bank Dave Conroy National City Mortgage Tammy McNeany Riverside Community Bank US Bank Dawn Schmidt Union Savings Bank Nick Gill The following qualifications apply: If you are a first-time homebuyer: 1. The property must be located within the South Main, Mid Town North, or 7 th St TIF area. 2. Total household income must be at or below IHDA income limits noted below: Properties located in an IHDA Qualified Census Tract 1 or 2 Person Households 3 or More Person Households 1 or 2 Person Households Properties not located in an IHDA Qualified Census Tract 3 or More Person Households $75,480 $88,060 $62,900 $72,335 Page 6

8 3. The purchase price must be at or below: Properties located in an IHDA Qualified Census Tract New Construction & Existing One Unit Properties NOT located in an IHDA Qualified Census Tract New Construction & Existing One Unit $231,830 $189,680 If you are NOT a first-time homebuyer: 1. The property must be located within the South Main, Mid Town North, or 7 th St TIF area AND the IHDA s Qualified Census Tract. 2. Total household income must be at or below IHDA income limits noted below: 1 or 2 Person Households 3 or More Person Households $75,480 $88, The purchase price for new construction or existing homes must be at or below: One Unit Two Units Three Units Four Units (Existing Only) (Existing Only) (Existing Only) $231,830 $296,750 $358,690 $445,770 Page 7

9 ADDI PROGRAM American Dream Downpayment Initiative The ADDI Program helps 1 st time homebuyers purchase a home located within a specific area of the City of Rockford by making available a 2 nd mortgage loan for six percent of the purchase price. No repayment is required unless loan terms are not met. Apply through a lender at a financial institution of your choice for the 1 st mortgage. The lender should contact the City of Rockford, Community Development Department at for further information. The ADDI program cannot be used in conjunction with any other City of Rockford program. Besides being approved by the Lender, the following qualifications apply: 1. The property must be located within the area bounded by Central Avenue on the west, Riverside on the north, the Rock River on the east, and Whitman/School Street on the south as shown on the attached map. 2. The maximum value of the property cannot exceed $172,632 which must be supported by an appraisal completed by an Illinois State Certified residential appraiser. The home must be a single family (one-unit), detached dwelling and become the principle residence of the family. 3. The homebuyer s household projected income (over the next year), cannot exceed eighty percent (80%) of median income, as defined by HUD and revised annually. 4. Funds are provided in the form of a mortgage forgiven 1/5th per year. Also, if the home is sold within the first (5) five years, sharing of the net proceeds is required. 5. The homebuyer must attend and complete the homebuyer s training seminar offered through Rockford Area Affordable Housing Coalition Neighborhood Institute PRIOR to purchasing the property. For further information contact the office at (815) The Rockford Housing Authority s Buying a Home Workshop is considered an acceptable substitute. A valid Certificate (3 years within issuance) of completion must be submitted with the request for financial assistance. If the certificate has expired, a one-on-one refresher course is required. 6. An inspection by a Community Development Construction Specialist is required prior to assistance being provided. The property MUST meet Minimum Property Standards which includes NOT HAVING ANY INTERIOR OR EXTERIOR DETERIORATED PAINT. Deteriorated paint is paint that is chipping, peeling, chalking, or cracking. If the house was built before 1978, deteriorated paint must be repaired using safe work methods by a State Licensed Lead Contractor or a Contractor who has successfully completed a HUD approved course. A Lead-based paint clearance inspection will also be required of the work site, if containment is used, after the painted surface has been repaired. If containment is not used, the entire home will require a clearance inspection. The ADDI funds will pay for one clearance. 7. Closing costs (not including prepaid charges and reserves, i.e. interest, and escrows) cannot exceed 5% of the first mortgage loan amount, as verifiable by RESPA, to participate. A copy of the executed RESPA is required as cost verification directly after closing. Lenders will be financially responsible for any discrepancies. 8. This transaction shall not result in cash back to the borrower, with exception to costs paid by homebuyer outside of closing and property tax credits over and above the required reserves. Page 8

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14 Racial Discrimination in housing of any size is a violation of the Civil Rights Act of In addition, the Civil Rights Act of 1966 contains a Federal Fair Housing Law (Title VII) which established fair housing as the policy of the United States. This prohibits discrimination on the basis of race, color, religion, national origin, handicap or family status. SUMMARY We hope this brochure has answered some of the questions you have about the homebuyer programs available through the City of Rockford. Information has been included regarding programs available as of February Because possible program revisions could affect the information contained herein, please contact Neighborhood Development for the latest on program guidelines and availability. Other programs are available for persons interested in home ownership programs and for those interested in improving their rental property. For further information please contact: NEIGHBORHOOD DEVELOPMENT a division of the City of Rockford COMMUNITY DEVELOPMENT DEPARTMENT 425 East State Street City Hall Building Rockford, Illinois TDD